On January 1, 20X0, Pepper Corporation issued 7,000 of its $15 par value shares to acquire 45 percent of the shares of Salt Manufacturing. Salt Manufacturing's balance sheet immediately before the acquisition contained the following items: SALT MANUFACTURING Balance Sheet January 1, 20x0 Book Value Fair Value Assets Cash and Receivables Land Buildings and Equipment (net) Patent Total Assets 46,000 75,000 124,000 85,000 330,000 46,000 85,000 154,000 85,000 Liabilities & Equities Accounts Payable Common Stock Retained Earnings Total Liabilities &Equities $152,000 134,000 44,000 $330,000 152,000 On the date of the stock acquisition, Pepper's shares were selling at $40, and Salt Manufacturing's buildings and equipment had a remaining economic life of 10 years. The amount of the differential assigned to goodwill is not impaired In the two years following the stock acquisition, Salt Manufacturing reported net income of $89,000 and $59,000 and paid dividends of $25,000 and $49,000, respectively. Pepper used the equity method in accounting for its ownership of Salt Manufacturing